It is time for the ‘Chelsea Chop’. It is Chelsea Flower Show this week, which is the traditional time to chop back early blooming herbaceous plants to encourage new growth later in the season.
It is a week I look forward to as I have been fortunate to have received complimentary tickets from the flower show’s main sponsor for a few years. Not this year, I also got the chop, actually everyone got the chop. Apparently, advisers are of low moral integrity and might be so influenced by the inducement being offered that they invest client money with the firm when it was not in the client's best interest, so it had to stop.
When is a ticket to Chelsea more of an inducement than a sales target? I run my own business and set my own earnings targets whereas an adviser with a large national advice firm is given a minimum production target or faces the chop. If flower show tickets are forbidden then, too, should firms that set minimum production targets, as these must motivate advisers to sell when it might not be in the client's best interest – simply to hang on to their authorised status.
As anyone who has recently moved networks or from appointed representatives to directly authorised representatives will tell you it is not an easy task. You face weeks, if not months, of being de-authorised, unable to earn, unable to advise existing clients and unable to collect fees. The incentive to achieve minimum production is much more of an inducement to sell than my annual trip to a flower show, but no-one has stopped vertically integrated firms or networks imposing minimum production or profit levels.
Aiming to achieve a sales target that attracts the benefit of a company-paid convention in foreign fields, a nice little enamel box, and an out-of-office allowance or simply the threat of receiving only half of your ongoing fees because you missed the minimum target, distorts the whole advice process and puts undue pressure on advisers and can never be in the best interests of the client. The sooner national firms come under the same inducements regime and drop sales targets and productivity bonuses, the sooner the financial adviser image will be improved among consumers.
Susan Hill is chartered financial planner of Susan Hill Financial Planning
